Riding High: CommScope

(RTTNews) - Explosive growth of connected devices and data centre traffic, streaming video, growing demand for virtualization in networking environments, and increasing usage of cloud infrastructure have been driving the demand for more bandwidth.

One of the network infrastructure companies working towards meeting the surging bandwidth demand challenge is CommScope Holding Co. Inc. (COMM).

CommScope offers Connectivity Solutions for indoor and outdoor wired communication networks, and Mobility Solutions for wireless communication networks. The company's client base reads like a who's who of major global telecommunication operators, enterprise customers and multi-system operators (MSOs).

After putting up a good show in terms of financial results in 2016, the company sees more growth opportunities ahead like network convergence, cloud-scale data centers and momentum toward 5G wireless networks, and is confident in its long-term market position.

CommScope reported a net income of $222.8 million or $1.13 per share in 2016, reversing a year-ago loss of $70.88 million or $0.37 per share. Net sales climbed to $4.9 billion in 2016 from $3.81 billion in 2015.

The company ended December 31, 2016 with cash of $428.2 million and total debt of $4.56 billion. (Data sourced from Yahoo Finance)

More than $800 million of debt since the acquisition of Broadband Network Solutions (BNS) in 2015 has been paid down, and the company expects to repay over $1 billion of debt by year-end 2017. CommScope acquired TE Connectivity's (TEL) Broadband Network Solutions business for roughly $3 billion to meet the growing demand for network bandwidth.

For the current quarter (Q1, 2017), the company expects earnings per share to range between $0.18 and $0.22, and adjusted earnings per share in the range of $0.49 to $0.54. Sales for the quarter are forecast in the range of $1.10 billion to $1.15 billion.

Looking ahead to full year 2017, CommScope expects earnings per share of $1.66 to $1.73, or adjusted earnings per share of $2.90 to $3.00, on sales in the range of $5.00 billion to $5.15 billion.

Last month, the company announced a $100 million share repurchase plan to mitigate the dilutive impact of stock awards. The repurchase authorization expires on February 28, 2018.

Having outperformed expectations and beat its goals in 2016, CommScope is optimistic about 2017 and its future.

Shares of CommScope touched an all-time high of $41.56 on Friday, before closing the day's trading at $41.22.

Is the best yet to come?